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- December 31, 2019 at 3:42 pm
Pg 154 no 23.10 task 4
I put the answer false because I thought when npv is 0. Because when cash inflow equal outflow I.e investment.Pg 151 no 23.7 task 1
I thought interest cost was relevant as cash outflow. I don’t understand the book answerDecember 31, 2019 at 5:46 pmFirst question:
The discounted payback period is indeed calculated as being when the NPV is zero. However it is the breakeven in that anything over that means that the NPV will be positive, which is the reason for having calculated it.
Second question:
Interest is never relevant as a cash outflow because the whole point of discounting is to take account of the interest.
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